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Credit card "Do Not Honor”: Meaning and main causes

What does "Do Not Honor" mean?

Do Not Honor is a generic code—usually “05” or  “2000” depending on the specific card network—sent by issuing banks after a credit or debit card transaction has been declined.  

The Do Not Honor code can be sent for a number of reasons, making it difficult for merchants and customers to know exactly what has triggered the decline. However, by understanding the main causes of Do Not Honor rejections, merchants can reassure customers that these codes are common and usually easy to resolve. In helping customers troubleshoot Do Not Honor declines, merchants have an opportunity to add value to their service and foster greater customer loyalty. 

Do Not Honor declines, at a glance: 

  • Decline codes are a set of numbers that appear on the merchant’s card terminal (in-person) or checkout page (eCommerce) after a transaction has been declined
  • The Do Not Honor code (usually “05” or “2000”) can occur for several reasons, including insufficient funds, suspected fraud, unusual account activity, or technical glitches
  • Since there are many possible explanations for a Do Not Honor decline, the easiest response in the moment is to prompt the customer to try an alternative payment method
  • To get a specific explanation for a Do Not Honor decline, and to prevent future declines, customers can contact their bank

*Learn more: How credit card transactions work

Reasons for the “Do Not Honor” decline 

Insufficient funds 

One of the most straightforward reasons for a Do Not Honor rejection is that the customer doesn’t have the funds or credit in their account to cover the cost of the transaction.  

Although this is a common cause of Do Not Honor declines, it’s important for merchants not to assume this to be the reason behind the code. Having a payment declined can cause customers to feel embarrassed and flustered. Asking questions like “Is there enough money in your account?” can add to this embarrassment or, in some cases, cause customers to get angry or defensive. The reality is that a generic Do Not Honor code does not provide a definitive explanation for a decline.   

AVS and CVV/CVC mismatch 

For online purchases, a common cause of Do Not Honor declines is that the billing address or CVV/CVC entered by the customer during checkout doesn’t match the information associated with the card.  

AVS and CVV/CVC mismatches are common causes of declines, which is why most payment gateways prompt customers to double-check the information they entered, fix any errors, and retry.  

Unusual purchase activity  

In some cases, Do Not Honor declines are prompted by what the bank’s automated anti-fraud system deems to be unusual purchase activity on the card. For example, the transaction amount may be unusually high compared to the customer’s typical purchases. Or, the item(s) being purchased might not match the customer’s typical purchase behaviour (e.g. online gambling, luxury goods, multiple gift cards, etc.). Sometimes it’s the volume of transactions and the timeframe in which they’re made that flags the system. 

If the bank is concerned about potential card theft or fraud, it will place a freeze on the card until it can go over the suspicious activity with the cardholder. Many modern banks will notify cardholders via email, text message, or online banking app notifications of suspicious activity and prompt them to confirm the validity of recent purchases. 

Missing or stolen card 

A Do Not Honor code can appear as the result of a card being reported lost or stolen. If this is the cause, then it’s likely that the person attempting to make the purchase is not the legitimate cardholder. However, as the Do Not Honor code is generic and vague, merchants have no way of knowing from a 05 or 2000 code alone whether or not the individual is using a stolen card.  

In some cases, if a card has been reported missing or stolen, the merchant will be presented with a more specific code, such as: 

  • Code 41 - Lost card 

If a merchant is presented with the code 41, it means the cardholder has reported their card to be lost or missing. For in-person payments, a code 41 may indicate that the individual is attempting to make a fraudulent transaction. 

  • Code 43 - Stolen card 

If a merchant is presented with the decline code 43, it means the cardholder has reported their card to be stolen and that there’s a very high likelihood the individual attempting to make the purchase is committing fraud.  

It was once the case that, after a Code 43 decline, merchants were told not to return the card to the customer and to contact the bank to escalate the matter to the proper authorities. However, now banks and cardholders rely on automated fraud-protected systems to prevent fraudulent transactions and merchants are not responsible for taking any further action.  

International or unusual location 

As part of the bank and card network’s anti-fraud measures, purchases that are made outside of the country can trigger an automatic, temporary hold on the card. For this reason, Do Not Honor declines are a common occurrence for cardholders who are on holiday or travelling abroad for work, and resolving it is as simple as contacting the bank.  

It’s not only international transactions that can lead to card freezes, however. Even domestic purchases, if deemed to be from an unexpected part of the country, or multiple locations scattered around the country, can trigger a hold on the card and lead to Do Not Honor declines. 

Responding to “Do Not Honor” declines 

In-person Do Not Honor declines 

1.- Ask if the customer has another way to pay 
The easiest and most effective way to manage an in-person Do Not Honor decline is to explain to the customer that the card isn’t going through and ask for a different method of payment, such as cash, a different card, or a mobile wallet.  

If the customer is confused by the decline or wants more information, merchants can explain the vague nature of the decline code and suggest that the customer call their bank to resolve the issue.  

2.- Wait while the customer contacts their bank 
If time allows, many merchants are happy to wait while the customer contacts their bank and gets the hold on their card removed. This is particularly common when the cardholder is making a significant high-value purchase, where it’s worthwhile for both parties to be patient and resolve the issue in the moment.  

3.- Be mindful of the customer’s feelings 
Even though card declines are common and don’t always indicate a lack of funds, having a card payment declined can be embarrassing for customers who are shopping in person.  

Merchants can help put customers at ease in the following ways: 

  • Avoiding the word “decline,” which carries a stigma 
  • Blaming  the machine, the card, or the system, rather than the person (e.g. “My machine doesn’t like that card for some reason, do you have another one you could try?”) 
  • Keeping the volume of their response down so as not to draw the attention of other customers 

eCommerce Do Not Honor declines 

1.- Prompt the customer to try alternative methods 
For online transactions, merchants can set up automated prompts for customers following a Do Not Honor decline, explaining that the payment cannot be authorised and asking for an alternative payment method. In many cases, these prompts will already be set up and automated through the merchant’s payment gateway.  

2.- Set up automated emails for declines 
When an eCommerce customer’s card is declined, merchants can send automated messages to the email linked with the customer’s account. The email can notify the customer of the decline and prompt them to update their payment method for future payments. This communication is a particularly important way of preventing future declines for customers with subscription-based services or products.  

Preventing future “Do Not Honor” declines 

What customers can do 
Although card declines are an unavoidable part of modern commerce, there are a number of measures customers can take to help prevent frustrating Do Not Honor declines in certain situations. These decline prevention measures include:  

1.- Checking account balance prior to purchases 
To avoid Do Not Honor declines due to insufficient funds, cardholders can check their account balance and/or remaining credit via online banking, their banking app, telephone banking, an ATM, or even by visiting their local branch. It’s particularly useful to check the account balance prior to making large purchases.  

2.- Confirming upper transaction limits 
Before making a large purchase, cardholders can call their bank to check whether there’s an upper limit on the amount of money they can spend in a single transaction and/or within a day. This information can allow them to plan ahead and break up large purchases into smaller transactions if necessary.  

3.- Informing the bank of international travel ahead of time 
Prior to leaving the country, cardholders can contact their bank to let them know when and where they’ll be traveling. However, they should be aware that this doesn’t always prevent automated anti-fraud systems from placing a freeze on the card and that they may still need to call their bank from abroad to remove a temporary hold.  

4.- Adjusting card settings in their banking app or website 
Many modern banks make it easy for cardholders to adjust their card settings from within a banking app or online banking website. Cardholders may be able to toggle on and off certain types of transactions, such as ATM withdrawals, contactless payments, gambling payments, and online payments. If their card has been declined in any of these contexts, cardholders can check their banking app, determine whether the transaction type is switched off, and switch it back on if needed. 

5.- Using mobile wallets for in-person payments 
Cardholders can help prevent Do Not Honor declines due to lost or stolen cards by keeping their physical card stored safely at home and using a mobile wallet instead. Unlike contactless credit and debit cards, mobile wallets offer biometric authentication, where the cardholder’s face or thumbprint must match in order to make a payment. This greatly reduces the chances of card theft and, subsequently, declined payments.  

What merchants can do 
Merchants can take several measures to help prevent and reduce the number of Do Not Honor declines, including:  

1.- Offering multiple ways to pay 
By presenting customers with several different payment methods, such as cash, card, and mobile wallets, merchants increase the likelihood that customers will find a method that works well for them. Customers typically choose methods that have been successful in the past and therefore are less likely to be declined.  

2.- Implementing upfront verification for online payments 
One of the best ways to avoid Do Not Honor declines for eCommerce transactions is to use a payment gateway that verifies card information prior to processing a payment and issuing a decline. For example, many gateways will perform real-time checks to ensure that the billing address and CVV/CVC match the card information before the transaction process moves forward. 

3.- Prompting customers to update card details 
For customers with recurring payments, such as those with subscription-based services or products, merchants can help avoid Do Not Honor declines by sending them emails when it's time to update their card details. 

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